Revenue Debate Stalls House Budget

The state Senate passed a budget on June 20, and some House budget leaders have set a mid-July target for the House to unveil its version of the budget.

Once the House approves a budget, leaders from the two chambers must compromise on one plan.

Members of the House have expressed dissatisfaction with the Senate plan -- namely for its use of $800 million in one-time funds to fund permanent programs. As a result, House members have brought forth proposals for raising revenue, ranging from eliminating certain tax breaks to targeted tax increases.

Legislators would use the additional revenue, as well budget cuts, to fill a $2 billion hole in this year's state budget.

Some House members have also complained that the Senate budget cut too deeply into some human service programs.

Rep. Warren Oldham, D-Forsyth, co-chairman of the House Appropriations Committee, said he is not sure about which proposal, if any, will emerge from the House.

"There are a multitude of proposals being debated on in the House," he said. "If we can get a consensus on any particular plan or a combination of some, it will be in our advantage."

Oldham said he does not prefer any particular plan over the others at this point. "All I'm interested in doing is raising revenue for the state budget," he said. "I'm not overly worried with how it is done."

Democrats, who control the House by the slim margin of 62-58, are having difficulty finding a consensus on solutions for the budget.

Some proposed plans include allowing local governments to raise the sales tax in exchange for reimbursements paid by the state, raising the tobacco and alcohol taxes, ending corporate tax breaks to banks or a combination of those.

Complicating matters for House legislators is the fact that this is an election year. Many legislators are wary of supporting tax increases and jeopardizing their popularity with their constituents.

Rep. Gregory Thompson, R-Avery, co-chairman of the House Appropriations Committee, said that the additional revenue might make it easier for the legislature to build a budget but that it is not absolutely necessary.

"Due to the budget crisis that we are in, it is recommended that we raise additional revenue to offset the spending deficit," he said.

"But if we were forced to submit a budget without the extra revenue, we would not be outside our responsibilities in doing so."

The State & National Editor can be reached at stntdesk@unc.edu.